Sunday, January 28, 2007

Bush touts nuclear, plug-in hybrids in state of the union
Most of the commentary on Bush’s state of the union speech centred on his rather subdued delivery, and on the symbolic significance of various sections of the live audience’s applause after this line and silence after that one. Few commented on the fact that, for a president who has been criticized for being anti-environment (largely because he has strong connections to the “oil industry” and has shown no interest in the Kyoto treaty), Bush was explicit in his support for two technological approaches to reducing air emissions: nuclear power and plug-in hybrid vehicles.

Most of those who did notice Bush’s conflation of energy and environment policy tended to focus on his support for ethanol. There aren’t many American politicians, especially among those who seek a high national profile, who oppose subsidies for ethanol. There is a practical political reason for this. It’s not a good idea to alienate the farm vote (most U.S. ethanol is made from corn); doing so could cost a Presidential aspirant the Iowa Caucus.

It might sould a bit odd for the president to get this specific in a general speech. Nuclear energy, plug-in hybrids, and ethanol mean little to anyone other than policy wonks. Why mention them at all? Were Bush’s references to these specific technologies a political gesture? Of course they were. As I mentioned in my
November 4 post, influential Democrats like Hilary Clinton, Tom Carper, and Bill Richardson have become strong vocal supporters of nuclear energy. This signals a major shift in the partisan dynamics surrounding this issue.

It is significant that other influential Democrats, like House Speaker Nancy Pelosi (who sat stone-faced while Bush touted nuclear and plug-ins) are less enthusiastic about these technologies. Bush knows this, and his references to nuclear and hybrids were an attempt to divide and rule.

But this political maneuver is justified because it is in the service of sound policy. Bush has chosen to support two technological approaches that, combined, represent by far the best way to reduce emissions in the medium and long term. Nuclear is one of the two proven ways to dispatch huge amounts of emission-free electricity to a modern power grid (conventional hydro is the other). And plug-in hybrids (which improve on existing hybrids like the Toyota Prius by allowing you to keep the battery charged with power from the grid; see the
California Cars Initiative and are the most likely technological route to reducing auto emissions.

It’s good to see Canada’s federal government supporting at least one of these technological approaches. Natural Resources Minister Gary Lunn has been talking up nuclear power in nearly every speech and interview since last week’s flurry of Conservative environment announcements. Support for hybrid vehicles, or at least an acknowledgement that they are the technological pony to bet on, would put Canada on exactly the right course to major emission reductions.

What form should this support take? I have been pushing the case for sales tax credits for hybrid cars, and a range of measures (including power production tax credits) for nuclear power and clean coal. I’ll take this up again in my next post. Stay tuned.

Sunday, January 21, 2007

Lunn’s 4,000 megawatts: is nuclear renewable?
The media are busy trying to interpret the ream of Conservative environmental announcements this week. As I have mentioned, it looks like Harper and company finally learned how to talk the green talk. That should worry professional green groups and the opposition—their exclusive copyright on feel-good buzzwords like “renewable” and “conservation” just expired.

The Conservative announcements included a promise to increase Canada’s supply of renewable electricity by 4,000 megawatts. Someone should ask: are the Conservatives particular about where those 4,000 megawatts of electricity generating capacity will come from? Surely they’re not expecting them to come from wind or tidal or a combination of the two. If they are, they won’t reach the 4,000 megawatt target without a lot of parallel investment in fossil generation, which, unlike most renewables, is dispatchable to a real-world power grid. At the end of the day, we still need reliable electricity.

The government’s press releases have been short on these critical details. But comments by Natural Resources Minister Gary Lunn, during his media blitz on Sunday, might give a clue. Lunn is by far the most overtly pro-nuclear federal minister in recent memory. It could be that the bulk of the government’s investment will go to nuclear. It certainly would be the only way Lunn can make good on his 4,000 megawatt promise.

Unless there is a further announcement down the road (don’t forget about the $538 million Martin–McGuinty deal of May 2005), this would require re-classifying nuclear so that it qualifies as “renewable.” I support nuclear, but calling it renewable would require some interesting taxonomical gymnastics. We might credibly pull this off if Canada were to begin recycling spent reactor fuel, à la George Bush’s Global Nuclear Energy Program (GNEP). Help me out, nuclear experts: could Canada be part of the GNEP?

Saturday, January 20, 2007

Harper Conservatives finally play the Kyoto PR game
This week’s series of federal announcements on renewables, wind power, tidal power, etc., sounded a lot like Liberal redux. To be fair to the government’s critics, that’s because a lot of it was Liberal redux. But this accusation has an extremely limited shelf-life. The Conservatives have finally realized the value of genuflecting to wind and tidal power as a way of pacifying professional green critics, and their announcements this week might dull the roar.

And there’s one major difference between last week’s Conservative announcements and those the Liberals trotted out in the eight years after they signed Kyoto: Natural Resources Minister Gary Lunn’s insistence that nuclear energy must play a vital role in Canada’s future.

This is the first time in a long while that we’ve had this kind of candour from a federal minister. It’s also the first time the blowback from the usual anti-nuclear suspects has been so faint. This in itself is interesting. Why so faint? Was it because the Conservatives are finally playing the PR game?

Or was it because the greens themselves have finally gotten serious about emission reductions? As I and others have pointed out, emissions from Ontario electricity generation were 12 million tonnes less in 2006 than in 2000, chiefly because 4 nuclear reactors have come back into service since 2003. Did the anti-nuke crowd weigh these massive emission reductions against the relatively small and totally manageable radioactive waste problem and decide to abandon their theological opposition to nuclear power?

John Bennett of the Climate Action Network, normally a relentless critic of nuclear, was uncharacteristically quiet on the nuclear part of Lunn’s announcement. Bennett is a smart guy and I have always wondered if his position on nuclear wasn’t just a bit laboured and doctrinaire. Perhaps he read the writing on the wall and decided to focus his talent and energy on battles he can win.

Another interesting development was International Trade Minister David Emerson’s visit to China. Lunn’s recent admonitions that the Ontario government choose CANDU reactors in its upcoming nuclear expansion ties in with this. As I mentioned on January 10, the feds are trying to boost AECL’s value to a prospective private sector buyer. It’s not just Ontario that might buy new CANDUs. You can bet that Emerson, in between the obligatory bouts of lip service to red-herring environmental technologies like hydrogen fuel cells, was pitching AECL’s flagship heavy water reactors to his Chinese hosts.

Imagine what AECL would be worth if it could nail new sales in Canada and China.

Tuesday, January 16, 2007

Hybrid cars and the GST: taking the giant step
How can Canada reduce emissions from transportation vehicles? These emissions account for twenty-five percent of the country’s greenhouse gases (GHGs), most of the carbon monoxide, and big proportions of volatile organic compounds and nitrogen oxides. The latter, combined with warm air and sunlight, are a big source of smog.

The answer is actually very simple: we have to use less gasoline and diesel to move us around. One of the most important ways of doing this, without giving up cars, is by buying and driving more hybrid electric vehicles.

Some governments both recognize this and are prepared to do something about it. Ontario is one. The province offers a sales tax rebate of up to $2,000 for the purchase of a hybrid.

Is the rebate spurring greater interest in hybrids? The Ontario Ministry of Finance says the province issued about 4,100 rebates for hybrid cars from 2004 to 2006. The rebates were valued at more than $4 million.

What effect have the rebates had so far? According to the federal government’s Fuel Consumption Ratings, if you were to drive a 2007 Toyota Camry Hybrid instead of the non-hybrid 4-cylinder Camry, you would save 1,200 kilograms of CO2 per year. For the sake of illustration, let’s say the 4,100 hybrid rebates in Ontario were for Camry Hybrids. Compared with the non-hybrid Camry, these 4,100 vehicles are offsetting roughly 4,920 tonnes of CO2 every year—not to mention significant carbon monoxide, nitrogen oxides, and volatile organic compounds.

How many more hybrids would join Canada’s fleet of passenger vehicles if the federal government were to match Ontario’s move by offering a GST rebate? Is it worth finding out? I think it is.

The former Liberal federal government didn’t agree. Its position was that (1) it would be too difficult to administer such a rebate, because the GST is applied in different ways depending on whether you buy or lease a vehicle; (2) it would narrow the tax base, making it difficult to apply a low sales tax rate equitably to all consumers; and (3) it’s too technology-specific—the Liberals thought that purchase incentives should be based on fuel efficiency, not a particular technology.

The first and second of these reasons are a bit weak. Ontario obviously found a way to administer a sales tax rebate, and no one is complaining about how unfair it is.

The third reason has some merit, though the former government contradicted itself by giving a direct subsidy to wind power, via the Wind Power Production Incentive—proving it actually had no problem with betting on particular technologies.

I would argue that hybrids are worth similarly favouring, because they are the only mass-produced vehicles whose manufacturers have shifted any percentage of their motive fuel from gasoline or diesel to electricity. Forget about hydrogen for mass transportation. Compared with grid electricity (which will top up the batteries of plug-in hybrids, the next generation of electric vehicles) hydrogen is far too expensive.

We’re at a critical point with transportation emissions. They account for roughly a quarter of Canada’s total greenhouse gas (GHG) inventory. Running vehicles on electricity more than gasoline and diesel is the most likely and most practical way to reduce transportation GHGs.

Will the Harper Conservatives read the writing on the wall and match Ontario’s forward-thinking sales tax rebate for hybrid vehicles? I can’t see it would do them any harm.

Wednesday, January 10, 2007

Are federal Conservatives set to support Ontario Liberals’ nuclear expansion?
Word has it that the prime minister and Ontario premier have been talking about heavy water and uranium. Specifically, they have discussed the prospect of the feds providing financial support for the purchase and commissioning of at least two CANDU reactors, probably at the Darlington generating station on Lake Ontario east of Toronto.

The Conservatives apparently think that a major sale will make the crown corporation Atomic Energy Canada Limited, and its CANDU technology, attractive to a prospective buyer. Better to use public money to facilitate a lucrative sale (presumably the windfall would outweigh whatever dollars Harper promised McGuinty) than to stand back and let deeper-pocketed light water competitors Areva or General Electric underbid AECL.

If the rumour is true, then Stephen Harper and Dalton McGuinty will make Ontario’s power generating sector better than Kyoto compliant, and put the entire province within easy reach of becoming the first advanced industrial economy to achieve the critical Kyoto target. Eat your heart out, California.

No doubt this will expose the federal Conservatives and Ontario Liberals to vicious tongue-lashings from most of the mainstream environmental movement. But if they present their deal properly, Harper and McGuinty should be able to fend off this criticism. The greens will have a hard time arguing against the sheer size of the emission reductions nuclear will bring about.

And now that the anti-nuclear tide is finally receding in Europe (where the latest go-around between Russia and its former satellites has convinced everyone that relying on Siberian natural gas is not the best energy policy), Canada should lead the way to putting nuclear energy back into the Clean Development Mechanism. This would boost AECL’s overseas prospects, especially in China and India.

Who knows, Harper might rethink his conviction that Kyoto targets are unattainable.

Tuesday, January 09, 2007

Star offers bizarre energy policy
Today’s Toronto Star carries an editorial criticizing Dalton McGuinty for “dragging his feet on global warming with a plan that would be likely to see [the humungous coal-fired generating station at] Nanticoke replaced by a new, clean nuclear generating facility a decade or more from now.”

McGuinty is dragging his feet all right, but not in failing to roll out a climate change policy. He’s dragging his feet in presenting its results to the public. As I have pointed out in previous posts, Ontario’s nuclear renaissance, in which McGuinty has played a major positive role, has wiped out millions of tonnes of emissions.

Well, if you don’t paint your own picture someone else will paint it for you. This is what the Star is now doing. After accusing McGuinty of dragging his feet on global warming, the editorial’s next sentence bizarrely suggests that Nanticoke be converted to natural gas. This in spite of the fact that the price of gas has skyrocketed in recent years, making gas-fired power generation a bad deal for everyone but the gas industry.

Suggestions like these almost make you wonder where Canada’s biggest newspaper gets its information and ideas from. Converting Nanticoke to gas has long been a dream of the gas industry–funded Ontario Clean Air Alliance, an Astro-Turf organization whose founding impetus came when eight of Ontario’s nuclear reactors were laid up in the 1990s, forcing the province to increase electricity generation from its coal-fired generators. (See my July 23 post.) When power sector emissions accordingly doubled, the OCAA, sensing a huge business opportunity for its clients, advocated that the coal plants be replaced by—guess what—natural gas.

But now that four of those nuclear reactors are back in service, offsetting nearly 18 million tonnes of emissions every year, the OCAA sees a threat to its plan. The very last thing it wants is for people to notice how far power sector emissions have plummeted as a result of the return of nuclear.

Is the Star playing along with this? Or does it just not know the numbers?

Thursday, January 04, 2007

Baird steps back into Ontario nuclear minefield: Harper assembles his election lineup
Now that John Baird is the new Environment minister he gets to revisit the Ontario electricity file, over which he recently presided as Ernie Eves’s Energy Minister. This will be interesting.

As the most recent Ontario Conservative to hold that job, Baird inherited the Pickering unit 4 near-fiasco from his predecessor Jim Wilson. The unit 4 project signaled Ontario’s recommitment to nuclear energy, and while intensely uncomfortable for all concerned, provided invaluable lessons for the unit 1 rehab, approved by the McGuinty Liberals in 2004 and completed on time and within budget in late 2005.

The return of units 1 and 4 has played a pivotal role in reducing Ontario’s electricity-sector greenhouse gas (GHG) and smog emissions by 12 million tonnes a year since 2000. As I have pointed out, this is a major achievement: it is by far the biggest emission reduction since Canada signed the Kyoto accord in 1997. Only a very few alert reporters have noticed.

Now the McGuinty government is looking to add to Ontario’s nuclear fleet. This will cost billions. Might it be time for someone at the provincial or federal level to tie the fiscal balance and environmental issues together? McGuinty has played the fiscal balance card endlessly, and has environmental vulnerabilities of his own (i.e., his promise to shut Ontario’s coal plants). Could nuclear power, by virtue of its high capital cost and proven track record of offsetting emissions on a grand scale, enter into the fiscal balance debate? Would Baird, as federal Environment Minister, support Ontario’s nuclear expansion? He is intimately familiar with Ontario electricity, and knows how politically risky it is to step through the nuclear minefield.

As a strong partisan Conservative, Baird would want to play the issue so that it hurts McGuinty and helps Harper, both of whom will lead their parties into elections in 2007. But, as I have pointed out in my October 4 post, it may be difficult to avoid helping McGuinty.

This is going to be a crazy year.